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Mr. GEKAS. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 808) to extend for 3 additional months the period for which chapter 12 of title 11 of the United States Code is reenacted, as amended.
The Clerk read as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. AMENDMENTS.
Section 149 of title I of division C of Public Law 105-277 is amended--
(1) by striking ``April 1, 1999'' each place it appears and inserting ``October 1, 1999'',
(2) in subsection (a)--
(A) by striking ``September 30, 1998'' and inserting ``March 31, 1999'', and
(B) by striking ``October 1, 1998'' and inserting ``April 1, 1999'', and
(3) by striking subsection (c).
SEC. 2. EFFECTIVE DATE.
The amendments made by section 1 shall take effect on April 1, 1999.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Pennsylvania (Mr. GEKAS) and the gentlewoman from Wisconsin (Ms. BALDWIN) each will control 20 minutes.
The Chair recognizes the gentleman from Pennsylvania (Mr. GEKAS).
GENERAL LEAVE
Mr. GEKAS. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 808, the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Pennsylvania.
There was no objection.
Mr. GEKAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the bill before us today will extend for 6 months a very important segment of the bankruptcy law, which is at this very moment undergoing gigantic reform considerations. But as to this particular segment, there is no dispute, no controversy, no opposition of any worth with respect to whether or not the current bill will see the light of day.
This 6-month extension for the special segment having to do with farmers and agriculture enterprises in our communities is a natural extension borne of the first introduction of specialized, particularized bankruptcy for farmers dating back to 1986. Since that time, again with very little opposition and with full understanding of the need to meet the changing requirements constantly of the farm community, those extensions have brought us up to April 1, 1999, and we will need this extension in order to continue granting to farmers the options accorded them through the bankruptcy under chapter 12.
The bill that we have introduced, which is also fast approaching full debate, the full bankruptcy legislation reform bills that we have comprehensively bonded together, that debate will include eventual inclusion of chapter 12 considerations. But in the meantime, following the pattern that we have seen evolving over the last year, we do not want to jeopardize any single farm, farmer, or entrepreneur in agriculture from taking full advantage, if need be, for the fresh start that is available to them under chapter 12.
With that in mind, we would then urge the passage of this 6-month extension under the current extension, which dates back to last year, and this will comprise an extra promise on the part of the Congress that the concerns
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Chapter 12 is a form of bankruptcy relief only available to ``family farmers,'' which was enacted on a temporary basis to respond to the particularized needs of farmers in financial distress as part of the Bankruptcy Judges, United States Trustees and Family Farmer Bankruptcy Act of 1986. It was thereafter extended in 1993 to September 30, 1998. Last year, it was further extended to April 1, 1999 to September 30, 1998. Last year, it was further extended to April 1, 1999 as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act.
As we know, there currently is a financial crisis in the farming industry as the result of weather conditions and economic turmoil in the international commodity markets.
If Chapter 12 is not available, farmers will be forced to file for bankruptcy relief under the Bankruptcy Code's other alternatives. None of these forms of bankruptcy relief work quite as well for farmers as does Chapter 12. Chapter 7 would require the farmer to liquidate his or her farming operation. Many farmers would simply be ineligible to file under Chapter 13 because of its debt limits. Chapter 11 is an expensive process that does not accommodate the special needs of farmers.
This 6-month temporary extension of Chapter 12 provides important protections to family farmers, during which time Congress can further assess these provisions. Only last month, I introduced, H.R. 833, the ``Bankruptcy Reform Act of 1999,'' a bill that would make Chapter 12 a permanent form of bankruptcy relief for family farmers. In fact, included in the comprehensive series of hearings on bankruptcy reform that the Subcommittee on Commercial and Administrative Law will hold, beginning this week, will be a segment devoted to the consideration of Chapter 12 and the ways it can be improved.
Accordingly, I urge my colleagues to vote for this bill.
Mr. Speaker, I reserve the balance of my time.
Ms. BALDWIN. Mr. Speaker, I yield myself such time as I may consume.
(Ms. BALDWIN asked and was given permission to revise and extend her remarks.)
Ms. BALDWIN. Mr. Speaker, H.R. 808, introduced by the gentleman from Michigan (Mr. SMITH), would extend chapter 12 of the bankruptcy code for an additional 6 months.
Chapter 12 is similar to chapters 11 and 13 of the Bankruptcy Code. Chapter 12 is the part of the Bankruptcy Code that is tailored to meet the economic realities of family farming during times of severe economic crisis.
With chapter 12, Congress sought to create a chapter of the Bankruptcy Code that provided a framework for successful family farm reorganizations. At the time of its first enactment, in 1986, Congress was unable to foresee whether chapter 12 would be needed by America's family farmers indefinitely. Congress extended chapter 12 twice since then, and it is currently set to expire on April 1, 1999, and H.R. 808 would extend it for an additional 6 months. Chapter 12 is the safety net of last resort for our farmers, and we must extend it.
The family farm is the backbone of our rural economy in Wisconsin and all over this Nation. Without chapter 12, if economic crisis hits a family farm, that family has no choice but to liquidate the land, equipment, crops and herd to pay off creditors, losing the farm, a supplier of food, and a way of life. With chapter 12 in place, a family's farmland and other farm-related resources cannot be seized to pay off debt.
A bankruptcy judge for the Western District of Wisconsin notes that chapter 12 has been used in his district about 50 times over the past year. Obviously, chapter 12 is needed.
Mr. Speaker, family farmers in Wisconsin have had a tough year. Our pork producers, like pork producers everywhere, are losing thousands of dollars every month. Soybean prices are at a 25-year low, and milk prices just dropped $6 per hundredweight in 1 month alone. This is on top of an archaic milk pricing system that unfairly disadvantage midwestern farmers. Safety nets that were in place before are now gone. Our farmers must have the assurance that if they are to reorganize their farm, to keep their farm, they can do so, and chapter 12 must be there for them.
I am pleased that my amendment to extend chapter 12 for 6 months prevailed in committee, and I thank the gentleman from Pennsylvania for bringing this bill to the floor so quickly. However, I believe that we should permanently extend chapter 12. Individuals in this country who consider filing for bankruptcy under chapter 7 or 13 do not have to worry whether that part of the Bankruptcy Code will be in place because it is permanent. I believe we should do no less for our family farmers and make chapter 12 a permanent part of our laws. I believe farmers, like all of us, should be able to plan for their futures.
I support H.R. 808 and hope it becomes law quickly, and I also look forward to working with the gentleman from Pennsylvania to ensure that chapter 12 gets permanently extended.
Mr. Speaker, I reserve the balance of my time.
[Time: 13:00]
Mr. GEKAS. Mr. Speaker, I yield such time as he may consume to the gentleman from Nebraska (Mr. BEREUTER).
(Mr. BEREUTER asked and was given permission to revise and extend his remarks.)
Mr. BEREUTER. Mr. Speaker, I thank the gentleman for yielding me this time.
The gravity of the situation for family farmers nationwide makes it imperative that chapter 12 bankruptcy is extended 6 months. Beyond this, it is this Member's hope that chapter 12 bankruptcy is extended permanently as it is done in the Bankruptcy Reform Act of 1999, H.R. 833. This Member is an original cosponsor of that Bankruptcy Reform Act introduced by the gentleman from Pennsylvania (Mr. GEKAS), the distinguished chairman of the Subcommittee on Commercial and Administrative Law of the Committee on the Judiciary.
I urge my colleagues to support this legislation.
Mr. Speaker, this Member rises today to express his support for H.R. 808, of which he is a co-sponsor, that extends Chapter 12 of the Bankruptcy Code for six additional months as amended by the Judiciary Committee. Chapter 12 bankruptcy, which allows family farmers to reorganize their debts as compared to liquidating their assets, is set to expire on March 31, 1999.
First, this Member would thank the distinguished gentleman (Mr. NICK SMITH), from Michigan for introducing H.R. 808. In addition, this Member would like to express his appreciation to the distinguished Chairman of the Judiciary Committee from Illinois (Mr. HENRY HYDE), and the distinguished Ranking Minority Member of the Judiciary Committee from Michigan (Mr. JOHN CONYERS, Jr.) for their efforts in bringing this measure to the House floor today.
Chapter 12 bankruptcy has been a viable option for family farmers nationwide. It has allowed family farmers to reorganize their assets in a manner which balances the interests of creditors and the future success of the involved farmer. If Chapter 12 bankruptcy provisions are not extended for family farmers, this will have a drastic impact on an agricultural sector already reeling from low commodity prices. Not only will many family farmers have to end their operations, but also land values will likely plunge downward. Such a decrease in land values will affect both the ability of family farmers to earn a living and the manner in which banks, making agricultural loans, conduct their lending activities. This Member has received many contacts from his constituents regarding the extension of Chapter 12 bankruptcy because of the situation now being faced by our nation's farm families--although the U.S. economy is generally healthy, it is clear that agricultural sector is hurting.
Mr. Speaker, in closing, this Member would encourage your support for H.R. 808, the six month extension of Chapter 12 bankruptcy.
Ms. BALDWIN. Mr. Speaker, I yield such time as he may consume to the gentleman from North Carolina (Mr. ETHERIDGE).
Mr. ETHERIDGE. Mr. Speaker, I thank the gentlewoman for yielding me this time. I rise today in strong support of this bill to extend for 6 months chapter 12 bankruptcy for America's small farmers. I want to thank the gentlewoman from Wisconsin (Ms. BALDWIN), the gentleman from Pennsylvania (Mr. GEKAS), the gentleman from New York (Mr. NADLER) and the gentleman from Michigan (Mr. SMITH) for their work on this important piece of legislation and for bringing it to the floor in this expedited manner.
I have been pleased to cosponsor this legislation that we will be passing
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While many folks are watching the Dow, small farmers are just trying to get through this current crisis. We should permanently extend the chapter 12 farmer bankruptcy provision so that small farmers have one less worry every morning when they get up to make sure that they harvest America's bounty that each of us enjoy each day. We are taking action today to make sure that these small farmers can still stay on their land and work through these hard times.
Chapter 12 allows farmers the option to reorganize debt over 3 to 5 years rather than having to liquidate their assets when they declare bankruptcy. It also encourages responsible efforts by farmers facing bankruptcy by requiring them to designate income not needed for farm operations or family costs to pay off their debt. As these payments are made, chapter 12 prevents foreclosure on the family farm. I think it is important for us to remember, we are talking about family farmers. To qualify, these farmers will have to have at least 50 percent of their gross annual income coming from farming, no less than 80 percent of debts resulting in farm operations, and total debts not more than $1.5 million.
Mr. Speaker, Congress must take action to lend a helping hand to so many folks whose backs are against the wall through really no fault of their own. They are facing tough times.
I strongly support this noncontroversial legislation on behalf of the hardworking farmers of North Carolina's Second District and across America.
Mr. GEKAS. Mr. Speaker, I yield such time as he may consume to the gentleman from Michigan (Mr. SMITH). This gentleman, the House should recognize, is a leader in the effort to preserve the options for farmers and agriculture entrepreneurs that are lodged in this extension and in the full bankruptcy debate which is yet to come.
Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman for yielding me this time. I certainly want to associate myself with the remarks of the gentlewoman from Wisconsin (Ms. BALDWIN) as well as the gentleman from Pennsylvania (Mr. GEKAS) and the gentleman from North Carolina (Mr. ETHERIDGE).
Mr. Speaker, agriculture is in a serious situation right now. Times are tough in farm country. While the rest of the economy is booming, American farmers and ranchers have not been invited to the party. Commodity prices, as the gentlewoman from Wisconsin indicated, are at record lows, export markets are shriveling up, and no relief is expected any time soon. While the farm credit system is currently sound, there are some producers who just will not be able to make ends meet in the short term. Some bankruptcy filings are inevitable.
In my district, a hog producer, a pork farmer, called me last week. He is the fourth generation on that farm. He is as smart as most any entrepreneur of small business. Yet because of prices, even with his efforts to lay off workers and to expand his working week to 55 or 60 hours, it still looks like that family farm may not make it.
Chapter 12 of the title 11 bankruptcy code is only available to family farmers. Last October, Congress temporarily extended chapter 12 for 6 months. My bill was passed out of this Chamber. Now we are looking at another extension because chapter 12 now is set to expire March 31, 1999. H.R. 808 will temporarily extend chapter 12 for another 6 months so that this critical option for America's family farmers does not expire.
Chapter 12 allows family farmers the option to reorganize debt rather than having to liquidate when declaring bankruptcy. The logic is that a farmer, like anybody else that needs particular tools to survive and make it back from a tough financial situation, needs the allowance to keep those tools. In this case, chapter 12 allows a farmer to continue to have some of those tools of production in order to keep farming and reorganizing. I think it is important that we note, to be eligible producers must be a family farm. That is characterized under current law by a debt not to exceed $1.5 million, not less than 80 percent of the debt related to agricultural activity, and they must have over 50 percent of their individual gross income from agriculture and their farming operation.
I am pleased that the chairman and this body is taking action on this legislation today. With less than a month to go before expiration, time is very short. I encourage as strongly as I might the other Chamber to move ahead on this legislation and get it to the President. I realize that many of us would prefer to see chapter 12 extended for a longer period of time or even made permanent. I trust that as the general bankruptcy reform debate is debated, a permanent fix for chapter 12 can be accomplished. In the interim, this legislation is needed to assure producers that this risk management tool is available to them.
Again, I thank both sides of the aisle and the chairman for moving ahead.
Mr. NADLER. Mr. Speaker, today we consider legislation to give family farmers an insulting 6 additional months of protection under chapter 12 of the Bankruptcy Code. While I seriously doubt anyone will vote against this bill, it is shameful, that we are being asked to play games with the future of family farms in America as we are witnessing the worst farm crisis since the birth of chapter 12 more than a decade ago.
No one disagrees that chapter 12 should be made permanent. No one. Bipartisan legislation has been introduced in the Other Body, by Senators GRASSLEY and DASCHLE, and in the House by our colleagues Representatives DAVID MINGE and NICK SMITH. Those bills also increase the eligibility threshold from the current $1.5 million in aggregate debt to $3 million, and give certain tax debts non-priority status if the debtor completes the plan. The first two provisions were recommendations of the National Bankruptcy Review Commission, and all three have been endorsed in a joint statement by the Commercial Law League of American, the National Bankruptcy Conference and the National College of Bankruptcy.
In fact, the sponsor of this legislation introduced a measure earlier in this Congress which would have extended chapter 12 by 6 months past the sunset date, rather than merely by the 3 months in this bill. He then introduced a bill granting only an additional 3 months. Evidently this more modest effort has found favor with the Republican leadership. It attracted the cosponsorship of the Chairman of the Subcommittee on Commercial and Administrative Law and was given a fast track.
The Gentlewoman from Wisconsin attempted to make chapter 12 permanent in Committee and was stopped by a procedural technicality. She then attempted a 2-year extension which was cut back to the 6 months we are considering today. As my colleagues know, the procedure being used today prevents us from even considering amendments to provide more time.
We had a similar experience in the last Congress, when the Gentleman from Michigan and I introduced H.R. 4697, which would have extended chapter 12 until September 30, 2000. This was short of our common goal of making chapter 12 permanent, but in view of the fact that the leadership of this House had allowed chapter 12 to sunset during a farm crisis, we felt it was a justifiable compromise. Unfortunately, the bill which ultimately was brought to the floor by the Republican leadership, H.R. 4831, and which ultimately passed the House and was enacted into law as part of the Omnibus Appropriations Act, extended chapter 12 only until the end of March 1999.
So for all you family farmers in crisis, the Republican leadership of the Congress wishes you a happy April Fools Day.
Why are we stringing family farmers along during a crisis? What policy justification could there be when there is bipartisan agreement in both houses that we give them permanent protection and provide other beneficial changes to protect America's family farms? Are the policy objections to doing so? If so, I have yet to hear one.
No, Mr. Speaker, this charade, which threatens family farms across the country, cannot possibly be justified on policy grounds. It certainly creates the unseemly appearance that family farmers are being cynically held hostage to a larger, more controversial bill which would undermine the existing legal protections for families and small businesses in financial crisis. ``You want to be protected? Help us strip protections from other families across the country.'' That certainly appears to be the message being sent today.
And who would be benefited by that larger legislation? Many of the same big banks who are trying to foreclose on America's small farms. Is that what we want? A nation owned by nothing but big banks and industrial farming operations?
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Mr. Speaker, I fear that if we continue to proceed in this manner, people will lose their farms and members from farming communities will be afraid to vote their consciences on the larger bill. Let's call an end to this political game. Let's free America's family farmers and give them the protection we all agree they deserve.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of H.R. 808, authorizing the extension of chapter 12 of title 11 of the United States Code for an additional 6 months.
Chapter 12 provides necessary protections for family farmers with regular annual income. Farming is a way of life not only in the heartland but also in the Southwest, Midwest and Southern regions of America. We must save America's farms! Chapter 12 is temporary legislation--we need permanent legislation--we need a bankruptcy bill that takes into account the financial crisis of farmers.
It is imperative that we pass permanent legislation that will adequately protect families with annual farm income. This extension of Chapter 12 is insufficient! Farmers need permanent legislation that will provide adequate and legal protection under the shield of bankruptcy. Now is neither the time to play partisan politics with bankruptcy nor America's farmers!
We should offer permanent legislation that will ensure the viability of agriculture and the family farmer. Now is not the time to play partisan politics with bankruptcy legislation--in an attempt to garner support for a draconian bankruptcy reform bill.
Chapter 12 was enacted on a temporary basis in 1986, then extended in 1993 for an additional 5 years--today we offer an additional 6 months of relief--Chapter 12 should be available to farmers on a permanent basis!
If we are serious about bankruptcy legislation--let us work together to provide a system that will safeguard the interest of the debtor, the debtor's family obligations and creditors. If we are serious about bankruptcy legislation--let us work together to pass legislation that will provide protection for everyone, especially individuals with special circumstances like farmers. There is no legitimate rationale for enacting permanent bankruptcy legislation to assist family farmers.
We must press forward and work together to find the best way to accomplish these goals for the benefit of all of the parties involved in the bankruptcy process. Congress must come together in the spirit of bipartisanship to enact bankruptcy reform to protect everyone.
Ms. BALDWIN. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
Mr. GEKAS. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
The SPEAKER pro tempore (Mr. LATOURETTE). The question is on the motion offered by the gentleman from Pennsylvania (Mr. GEKAS) that the House suspend the rules and pass the bill, H.R. 808, as amended.
The question was taken.
Mr. SMITH of Michigan. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the Chair's prior announcement, further proceedings on this motion will be postponed until tomorrow.
END